WASHINGTON Phil Angelides thinks his commission has a tale to tell, but it's not the kind of history that should be allowed to repeat itself.
The Financial Crisis Inquiry Commission this month will begin probing how the U.S. financial system came perilously close to collapse in the fall of 2008, leading to the worst economic downturn since the Great Depression.
Congress ordered the 10-person commission to examine 22 causes of the debacle, "from A to V" as Angelides puts it. They range from things that were done, like mortgage fraud, to things mostly left undone, like over-the-counter derivatives regulation.
Armed with subpoena power to bring witnesses and spring documents, the panel is supposed to find out what caused the collapse of major financial institutions, like Lehman Brothers Holdings Inc, from August 2007 to April 2009 -- as well as those that would have failed without government aid, like American International Group Inc.
The first public meeting is set for September 17, with the group to issue a report to Congress by December 2010.
"The purpose of this report is to lay out ... what in fact occurred so that everyone can learn the lessons of this calamity," Angelides said in a recent interview.
The former California state treasurer promises a "thorough, no-holds-barred inquiry," including public hearings. But he does not want to overwhelm the public with a jumble of facts, even though he acknowledges the facts are "extraordinarily" important.
He hopes his report will include "real-life examples of the kind of practices ... that should never happen again."
'MERELY A DISTRACTION'
There is some skepticism about how effective the panel can be in helping to make U.S. financial institutions safer.
Some analysts say the causes of the crisis are known -- after all, the panel's enabling legislation lists 22 of them -- and note that U.S. President Barack Obama has put his financial reform proposals on the table. Meanwhile, the economy appears to be improving.
"It seems like we're past the point of a commission recommending what we should do," said Jaret Seiberg, policy analyst at investment research firm Concept Capital.
"To me the commission is merely a distraction," Seiberg said. "I think they're going to rehash old news that has been well dissected on Capitol Hill for the last 12 months."
But economic journalist Robert Kuttner thinks the group could play a role like the so-called 1930s Pecora commission, a dramatic Senate probe of the causes of the 1929 stock market crash that helped produce momentum for New Deal financial reforms.
"I don't think it is too late to be effective, since the struggle for reform will be ongoing throughout Obama's term. The New Deal took about six years to make over the financial system," said Kuttner, senior fellow at the think tank Demos.
A Republican-appointed member of the panel, Douglas Holtz-Eakin, said it should focus on its fact-finding mission and not be concerned with Congress' policy-making pace.
"I could not possibly forecast how quickly Congress will move ... They'll do their work, we'll do ours," Holtz-Eakin, a former director of the Congressional Budget Office, said.
'THIS IS NOT A CIRCUS'
Obama's Democrats named six of the commission's members, and Republicans, four. Many analysts will be watching to see if members can put the investigation of the financial meltdown ahead of their party loyalties and political connections.
The Center for Responsive Politics says the commission's vice chairman, former Republican Representative Bill Thomas, received $1.8 million in campaign contributions over a number of years from financial, insurance, and real estate interests -- the very industries the commission will be probing.
It says another member, former Democratic Senator Bob Graham, raised $2.1 million from similar interests.
Angelides and his wife have been big donors to Democrats, "and always will be and always wish we could do more," he said. But he's optimistic the panel can transcend party lines.
"I think the way we avoid politicizing this effort is by the way in which we conduct ourselves. This is not a circus, but it's also not an exercise to sweep things under the rug."
He brushed aside a suggestion that he is the new Ferdinand Pecora, the aggressive lawyer of the 1930s Senate probe, who staged electrifying hearings grilling leading bankers of his day.
"I'm Phil Angelides."
In addition to Angelides and Graham, the other members named by congressional Democrats are Brooksley Born, former head of the Commodity Futures Trading Commission; Heather Murren, a retired managing director at Merrill Lynch; Byron Georgiou, a Las Vegas-based businessman and attorney; and John Thompson, Symantec Corp board chairman.
The Republican appointees are Thomas, a former chairman of the House Ways and Means Committee; Holtz-Eakin; Peter Wallison of the American Enterprise Institute; and former National Economic Council Director Keith Hennessey.
(Editing by Jeffrey Benkoe)